Japanese yen strengthens after Powell comment on smaller increases
Loss of $245m FTX from Temasek ‘done reputational damage’ to Singapore, says Deputy Prime Minister
Singapore’s Deputy Prime Minister Lawrence Wong said the state’s sovereign wealth fund’s loss of $275 million in failed crypto exchange FTX is “disappointing and has caused reputational damage” to the city-state.
But the loss of investment does not mean the governance system is not working, Wong said, adding that an internal review was under way.
“Rather, it’s the nature of investing and risk-taking,” he said.
The loss of the FTX will not affect the net investment returns of Singapore’s reserves, which are “linked to the overall long-term expected returns of our investment entities rather than individual investments,” he said.
Going forward, Singapore plans to require cryptographic service providers to implement basic investor protection measures, but “no regulation can remove this risk”, it warned.
– Sheila Chiang
China’s Caixin manufacturing PMI marks fourth straight month of contraction
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index for November came in at 49.4, above expectations of 48.9 in a Reuters poll of economists.
The reading marks the fourth consecutive month of contraction, following a reading of 49.2 in October and falling to 48.1 in September – below the 50-point mark that separates growth from contraction.
Separately, the official PMI print from China’s National Bureau of Statistics released on Wednesday came in at 48, showing the second straight month of contraction in manufacturing activity.
– Jihye Lee
Oil prices changed little as the White House assesses additional oil reserves
The White House is considering building additional oil reserves in the context of the coming winter and uncertainty surrounding the market, sources familiar with the matter told CNBC.
The Biden administration is weighing whether to ask Congress to raise the storage cap, potentially doubling it, to build up additional reserves that the administration could release if supply tightens or prices rise again, the people said.
The US currently has about 1 million barrels of heating oil in New York and Connecticut.
The White House is bracing for a potential price hike as the European oil embargo and the G-7 price cap on Russian oil loom, potentially disrupting supplies.
Oil prices were little changed in Asia’s early hours. West Texas Intermediate futures fell slightly to $80.53 a barrel, while Brent crude futures fell 0.06% to settle at $86.92 a barrel.
— Kayla Tausche, Lee Ying Shan
CNBC Pro: Forget Amazon. Here’s What Leading Tech Investor Paul Meeks Is Buying
Investor confidence in the tech sector has been shaken this year amid a flight to safety, but top tech investor Paul Meeks said he is now “more bullish” on the sector than he has been in recent months, although he remains selective on the sector.
He tells CNBC which stocks he prefers.
Professional subscribers can read more here.
— Zavier Ong
South Korea’s revised GDP confirms growth in the third quarter
South Korea’s revised Gross Domestic Product for the third quarter confirmed 3.1% year-on-year growth – higher than the 2.9% expansion seen in the second quarter.
The economy recorded a slower quarterly growth of 0.3% in the third quarter, after growth of 0.7% in the previous period.
Separately, South Korea reported a trade deficit of US$7.01 billion in November, beating expectations of US$4.42 billion – marking the third consecutive month of widening trade deficit driven by weak exports.
Exports shrank 14%, below forecasts for an 11% drop — while imports grew more-than-expected at 2.7%, according to preliminary customs data.
– Jihye Lee
CNBC Pro: UBS reveals 15 global stocks sensitive to China’s reopening plans
Chinese stockpiles surged this week after the country’s health authorities reported a recent rise in vaccination rates, which experts say is crucial to the country’s reopening.
The impact of Beijing’s changed approach to dealing with the Covid-19 outbreak is being felt not only in China, but across the world as well.
Swiss bank UBS identified 15 stocks in the MSCI Europe Index that it will outperform “in an environment where China’s growth recovers and the country reopens its borders”.
CNBC Pro subscribers can read more here.
Powell continues to believe in a path to a soft landing
Federal Reserve Chairman Jerome Powell says he continues to believe in a path to a “soft” landing – even as the path has narrowed in the past year.
“I would like to continue to believe that there is a path to a smooth or soft landing,” Powell said at the Brookings Institution.
“Our job is to try to achieve that, and I think it’s still possible,” Powell said. “If you look at history, it’s not a likely outcome, but I would say this is a different set of circumstances.”
Ratings Jump on Powell’s Comments
Comments by Fed Chair Jerome Powell indicating the central bank will slow further interest rate hikes as early as December, weighed on all three major indexes.
O S&P 500 rose 0.6% from the red in the news.
O down it was almost flat after trading down for most of the day.
O composite nasdaq gained strength to 1.3% upwards.
Powell says the Fed may “moderate the pace” of future rate hikes due to the lagged effect of past hikes
Federal Reserve Chair Jerome Powell told a hearing at the Brookings Institution on Wednesday that the central bank can afford to relax its tighter monetary policy at its December meeting (which is due to end Dec. .
The lagged effect of the higher rates already adopted in 2022, plus the reduction in the size of the Fed’s balance sheet through quantitative tightening, means that “it makes sense to moderate the pace of our rate increases as we approach the level of containment that will be enough to reduce inflation,” Powell said.
“The time to moderate the pace of rate hikes may come as early as the December meeting,” said the 69-year-old Fed chairman.
In response to Powell’s remarks, the S&P 500 quickly rallied to around 3970 versus around 3950 prior to the address.
—Scott Schnipper, Jeff Cox